Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow and margin improved compared to both the prior quarter and the same quarter a year earlier. The filing noted that operating cash flow for the first six months of the fiscal year was higher than a year ago, and the net debt to EBITDA ratio was lower.
- Revenue was higher than the preceding quarter and the year-ago quarter. Operating cash flow improved more than revenue, leading to higher free cash flow and a wider free cash flow margin.
- Compared to the immediately preceding quarter, free cash flow and margin were higher. Compared to the same quarter one year earlier, free cash flow and margin were also higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$401.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$573.4M
Cash generated by operations before capital spending.
CapEx
$172.0M
Capital spending and related asset purchases.
FCF margin
10.4%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-09-30 | $3.7B | $436.7M | $192.5M | $244.2M | 6.7% |
| 2022-12-31 | $3.7B | $859.2M | $202.8M | $656.4M | 17.9% |
| 2023-03-31 | $3.6B | $198.2M | $173.7M | $24.5M | 0.7% |
| 2023-06-30 | $3.9B | $573.4M | $172.0M | $401.4M | 10.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 121.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Improvement
Operating cash flow was higher than both the prior quarter and the year-ago quarter, while capital expenditure remained relatively stable. This was the strongest observable driver of the quarter's free cash flow.
The increase in operating cash flow was the primary contributor to the higher free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the preceding quarter and the year-ago quarter. Operating cash flow improved more than revenue, leading to higher free cash flow and a wider free cash flow margin.
Compared to the immediately preceding quarter, free cash flow and margin were higher. Compared to the same quarter one year earlier, free cash flow and margin were also higher.
Monitor the trajectory of operating cash flow, as it was notably higher than in the prior quarter.